Tanning skill is used to turn skinned hide into leather, which Leatherworkers need to create leather products. You can also sell leather at a Leathercrafting Shop. To tan hide, you must stand next to a tanning vat.

Double-click on the skinned hide, and then select the vat. After 6 seconds you'll be told whether you tanned the hide properly, or destroyed it. The odds of successfully tanning hide equals 15% + (Tanning Skill / 2) + (Intelligence / 6). Leather is worth 30, so you’ll get about 15 if you sell it at the Leathercrafting Shop. Leatherworkers can make leather into leather items.